JobKeeper: Is Your Business Eligible?

The payment was scheduled to expire after 27 September 2020 but will now continue for eligible businesses, including the self-employed, and not-for-profit organisations until 28 March 2021.

In addition to extending the income support program, the $1,500 per fortnight payment for eligible employees and business participants will be lowered to $1,200 per fortnight from 28 September 2020. This amount will be reduced to $1,000 per fortnight from 4 January 2021 until 28 March 2021 when the program is scheduled to end. 

These rates apply to employees who were working in the business 20 hours or more per week on average in the four weeks of pay periods before 1 March 2020. They also apply to business participants (such as owner and sole traders) who were actively working in the business for 20 hours or more per week (on average) during the month of February 2020. 

Employees and business participants who were working less than 20 hours per week will receive $750 per fortnight from 28 September to 3 January 2021. This amount will decrease to $650 per fortnight from 4 January to 28 March 2021. 

Businesses will be required to determine the payment rate they are claiming for their eligible employees. This also applies to business participants, including sole traders.

The eligibility requirements for the JobKeeper payment scheme are also changing. From 28 September 2020, businesses will need to reassess if they are eligible for the JobKeeper Payment. This includes demonstrating a relevant decline in turnover based on their actual GST turnover in the June and September quarters of 2020 to be eligible for the JobKeeper payment from 28 September 2020 to 3 January 2021. 

For the next phase, from 4 January 2021, businesses will need to look at their turnover again to determine if they are eligible for the JobKeeper payment. They will have to show that they have met the test for the decline in actual GST turnover in each of the June, September and December quarters of 2020 to continue with the JobKeeper Payment from 4 January to 28 March 2021. 

The criteria for a decline in turnover to be eligible for JobKeeper payments under the extensions are:

• a 50 per cent decline for businesses with an aggregated turnover greater than $1 billion
• a 30 per cent decline for businesses with an aggregated turnover of $1 billion or less
• a 15 per cent decline for Australian charities and not-for-profits (not including schools and universities). 

In general, you can use the basic criteria above, based on GST turnover. In some cases, where the normal comparison period is not appropriate, an alternative test can be used. This could apply if your business has been operating less than one year.

If a business or charity does not meet the new turnover tests for the extension periods, it will not affect their eligibility before 28 September 2020.

The rules for employee eligibility will not change as long as their employer qualifies under the extension. This includes:

• Being employed by an employer meeting the eligibility criteria (this includes if you were stood down or re-hired)
• Being (for an eligible employer) either a full-time, part-time or fixed term employee at 1 March 2020; or a long-term casual employee (who was on regular or systematic payments for a minimum of 12 months) as of 1 March 2020 (and not employed as a permanent employee with another employer
• Being at least 18 years old at 1 March 2020
• Being an Australian resident (under the Social Security Act 1991) or being an Australian resident for the purpose of the Income Tax Assessment Act 1936 and the holder of a Subclass 444 visa by 1 March 2020
• Not receiving government parental leave or dad or partner pay under the Paid Parental Leave Act 2010 or a payment for a person’s total incapacity to work in accordance with Australian worker compensation law. 

Only one employer can claim a JobKeeper payment for an employee. People who are self-employed will be eligible to receive the payment if they are not a permanent employee of another employer and meet the relevant turnover test.

For more information and updates, check out the ATO website.

The Commonwealth Government has introduced other measures to help businesses. In March 2020, the Instant Asset Write-Off maximum asset amount was increased to $150,000 and extended to 30 December 2020. In October 2020, the threshold amount was removed (so there is no limit to the asset value) and in the instant asset write-off was extended until 30 June 2022. Find out more in How to Use the Extended Asset Write-Off in Your Business.

The SME Guarantee Scheme is another program designed to help businesses overcome the challenges raised by the corona virus pandemic.